The discussions surrounding the EU Commission's omnibus proposal are gathering pace. Last week, important consultations took place both at EU Council level and in the European Parliament. Initial positions show a strong polarization between the political camps as well as a mixed picture of company reactions.

Status of implementation and initial parliamentary debates

With the omnibus package, the EU Commission has initiated a process that provides for significant changes to key sustainability requirements, including the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). While the changes are welcomed by parts of the business community as a necessary relief, critics warn of a dilution of the original ambitions of the EU sustainability agenda.

The European Parliament has started its first debates on the proposal. Clear political fronts emerged:

• The European People's Party (EPP) supports the initiative in principle, but is calling for targeted improvements.
• Left-wing parties reject the project as they believe it undermines key elements of the Green Deal.
• Right-wing conservative groups are calling for even greater deregulation.
• The EU Commission itself is pushing for swift adoption in order to ensure that companies can plan ahead.

The coming weeks will show what the majority situation in Parliament will look like and what political alliances will emerge. A central argument in the discussion remains the competitiveness of European companies, especially SMEs.

Reactions from the business community: between approval and skepticism

While some large companies such as Nestlé and Signify are pushing for swift legal clarification in order to be able to plan their compliance processes efficiently, others such as Tony's Chocolonely are calling for the strict sustainability requirements to be maintained. IKEA was also critical of possible dilution, particularly in the area of CS3D.

Numerous business associations welcome the omnibus initiative as a first step towards more pragmatic regulation. However, the European Industry Association and the Deutsches Aktieninstitut in particular are calling for further improvements, especially with regard to the voluntary application of the EU taxonomy. At the same time, uncertainty remains as to the extent to which the planned reduction in CSRD reporting requirements will actually be implemented.

National developments: Inconsistent positions

The reactions at national level are also heterogeneous. While some senators in France are proposing a four-year postponement of the CSRD obligations, Denmark is encouraging companies to continue reporting in accordance with the existing regulations until a final decision has been made at EU level. This discrepancy underlines the current uncertainty and the need for clear transitional arrangements.

Conclusion and outlook for companies

The next few months will be decisive in determining how the omnibus proposal will be structured. For companies, this means

• SMEs should continue to hope for possible relief, but must expect uncertainties in the short-term implementation.
• Large companies that have already invested in the implementation of the CSRD and CS3D could now find themselves confronted with a changed regulatory situation.
• All companies should structure their sustainability reporting flexibly in order to be able to react to future changes.

The political dynamics will continue to develop. Companies should follow the discussions closely and, if possible, contribute their interests to the ongoing consultations.